The J. Paul Getty Trust paid $64,000 in legal fees for a wealthy board member to testify in an Italian legal proceeding despite warnings from attorneys that doing so would be inappropriate and might jeopardize the nonprofit's tax status.
Barbara Fleischman, elected to the Getty board in 2000, incurred the fees in connection with a deposition she gave in the criminal case against former Getty antiquities curator Marion True.
Fleischman and her late husband, Lawrence, had become close friends with True while building a $60-million antiquities collection that the Getty acquired in 1996.
Fleischman joined the Getty board just as the trust learned that True was the target of an Italian investigation into trafficking in looted antiquities.
True's defense attorney asked Fleischman to testify on the curator's behalf. Fleischman agreed to do so and asked the Getty to pay for her legal fees, records show.
Getty general counsel Peter Erichsen told Fleischman in January 2003 that the Getty was not obligated to pay her fees because her testimony was unrelated to her service as a trustee.
He warned board members in an April 2003 memo that paying the bills "would not be appropriate." He said payment would risk violating federal tax rules, which prohibit self-dealing, and go against Getty bylaws, which limit reimbursement of legal fees to actions taken as a trustee.
Helene Kaplan, the board's vice chair and a New York attorney specializing in nonprofit law, agreed. "I think we would be jeopardizing our potential tax exemption by any potential plan to give her legal fees," she said, according to a voicemail transcribed for Getty files.
But the Getty reversed its position and began paying the fees nearly two years later, records and interviews show.
Getty officials refuse to explain what led to the reversal, citing attorney-client privilege. They note that the payments were reported in the trust's latest tax filing.
The payments raise further questions about possible misuse of tax-exempt funds by Getty board members, who are prohibited by J. Paul Getty's will and federal tax rules from benefiting financially from their service at the institution.
Tax experts, consulted about the payments by The Times, said they agreed with Erichsen's initial advice and expressed surprise that the Getty had gone against it.
"Unless there's something significant that intervened, it's astonishing," said Harvey Dale, director of the National Center on Philanthropy and the Law at New York University.
